The SEC obtained a court order freezing the assets of an allegedly fraudulent initial coin offering claiming to use cryptocurrency to “revolutionize banking.”
According to the SEC’s Complaint, Jared Rice Sr., Stanley Ford and their company, AriseBank (collectively, the “Defendants”), offered investors the “AriseCoin” cryptocurrency, which they claimed would fund the world’s first decentralized bank. The SEC alleged that AriseCoin was an improperly unregistered security, and that Defendants made various fraudulent misrepresentations to solicit investments from retail investors. Among the misrepresentations was the claim that AriseBank was FDIC-insured and had raised over $600 million in two months. In addition, the SEC contended that Defendants failed to disclose AriseBank executives’ relevant criminal histories to investors.
In addition to freezing the Defendants’ assets, the court appointed a digital receiver over AriseBank.